• Tammy Hoang

Do you need to file an Income Tax Return?

Not everyone is required to file an income tax return each year. Generally, if your total income for the year doesn't exceed certain thresholds, then you don't need to file a federal tax return.

Consider your gross income thresholds

Most taxpayers are eligible to take the standard deduction. The standard tax deduction amounts that you're eligible for are primarily determined by your age and filing status.

The standard deduction, along with other available deductions, reduces your income to determine how much of your income is taxable. As long as you don't have a type of income that requires you to file a return for other reasons, like self-employment income, generally, you don't need to file a return as long as your income is less than your standard deduction.

For example, in 2019, you don't need to file a tax return if you all the following are true:

  • Under age 65

  • Single

  • Don't have any special circumstances that require you to file (like self-employment income)

  • Earn less than $12,200 (which is the 2019 standard deduction for a single taxpayer)

What if I only receive Social Security benefits?

In most cases, if you only receive Social Security benefits then you would not have any taxable income and therefore would not need to file a tax return.

When Social Security benefits may be taxable

When determining whether you need to file a return and you receive Social Security benefits, you need to consider tax-exempt income because it can cause your benefits to be taxable even if you don't have any other taxable income.

Here's an example of where you may need to file, even with tax-exempt income:

  • You are under age 65 and receive $30,000 in Social Security benefits, but also receive another $31,000 in tax-exempt interest. $14,700 of your Social Security benefits will be considered taxable income.

  • This is greater than your standard deduction ($12,200 for a single taxpayer in 2019) and you would need to file a tax return.

To figure out if your Social Security benefits are taxable:

  • Add one-half of the Social Security income to all other income, including tax-exempt interest.

  • Then compare that amount to the base amount for your filing status.

  • If the total is more than the base amount, some of your benefits may be taxable.

For more information, click here to learn more.

Sources:"Does Everyone Need To File An Income Tax Return"

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